When people talk about Warren Buffett (Trades, Portfolio), the first thing that comes to mind is investing. You immediately think about stocks, value investing, guru investors and even Berkshire Hathaway (BRK.A, Financial) (BRK.B, Financial). That’s also probably how Buffett will be remembered for several years to come, pretty much like Benjamin Graham is today.
During a recent interview with CNBC’s "Squawk Box," Buffett insisted that he would rather be remembered as a teacher than the billionaire he is. And in a sense, Buffett has probably helped most people by offering life lessons rather than investing tips to those interested in the stock market.
Even in the interview with CNBC’s Becky Quick on “Squawk Box,” those who listened keenly to his answers would have noticed how the phrasing of his statements leaned toward continuous learning as one of the basic principles of success.
To illustrate this, one of the most popular life coaches and self-made millionaires, Tai Lopez, summarized a list of life lessons learned from the interview; according to Lopez, one of the key points noted was Buffett’s emphasis on continuous learning and the relation to successful living.
Also in the interview were Microsoft (MSFT, Financial) founder Bill Gates (Trades, Portfolio) and Berkshire Hathaway Vice Chairman Charlie Munger (Trades, Portfolio). While summarizing the lessons learned in the above YouTube video, Lopez said that due to the dynamic nature of the world in which we live, most things that we learn expire within a time frame of about six years, thereby becoming less relevant to modern life. This, he says, is one of the reasons why continuous learning is so important to becoming successful, regardless of whether you are a stock market investor or a businessperson.
The same sentiments were echoed by Munger and Gates, and even when you look at their lifestyles, they all seem to emphasize continuous learning as a foundation for sustaining success.
Buffett noted that he and his company understand some of today's problems cannot be solved using knowledge acquired several years ago. That does not mean that those lessons are completely useless. He insisted that it is important to retain that knowledge while learning more in the modern world because even when it comes to investing, the brick-and-mortar basics remain crucial all the way up.
Success is relative, which is why what some people consider to be a success in life may not be necessarily good enough for others. According to this Forbes article, Tai Lopez says that to achieve this individual goal, it would be better to identify your target first and then break things downward to know exactly what you need to do and when to do it. Call it a “top-down” kind of approach.
In a way, this is also one of the best ways of hunting down value stocks. Given the thousands of stocks in the market, it can be difficult when looking for your perfect value stock. You can create a stock evaluation profile that helps you sift through the chaff. For instance, Buffett, the world’s most famous value investor, has his own stock evaluation profile that helps him pick value stocks. But this is not enough.
During Berkshire Hathaway's most recent annual shareholder meeting, Munger responded to a question regarding the persistent use of EBITDA in stock valuation. He was keen to point out that those analysts who do not treat depreciation as a cost item are wrong. Buffett, on the other hand, has been quoted as saying that he prefers stocks that do not rely on physical assets to generate income because depreciation is a cost. This gives an idea of what you can find in Buffett’s stock evaluation profile.
He also mentions that in life, opportunities will always keep coming along, but as a person, it is inevitable that some will be missed. He emphasized this by pointing to the opportunities he and Berkshire Hathaway missed by failing to invest in Amazon (AMZN, Financial) and Alphabet (GOOG, Financial) (GOOGL, Financial) at the time, saying that even though he missed those opportunities, the important thing was that he capitalized on others that paid off.
In this regard, Lopez says that you only need to take up a few huge opportunities in life to succeed and that missing one should not become your biggest regret in life. Instead spend time hunting for new ones because, as Buffett noted, there will always be others on the way.
Disclosure: I have no position in any stock mentioned in this article.
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